Purchase Solution

Income statement differences for service, merchandiser

Not what you're looking for?

Ask Custom Question

Would a traditional income statement differ depending on whether the business is a service organization, merchandiser, or manufacturer?

Could we use managerial accounting "tools" to assess the profitability of an organization other than a manufacturing business, or are the topics we are learning only related to manufacturing?

If we could use these concepts in service and/or merchandising businesses, how would we go about doing so?

Purchase this Solution
Solution Summary

Your response is 293 words and shows how managerial techniques can be used in retail and service firms. Examples are given.

Solution Preview

Would a traditional income statement differ depending on whether the business is a service organization, merchandiser, or manufacturer?

Yes, it would differ in one respect - whether it had cost of goods sold. Merchandising (like Ace Hardware) and manufacturers (like Tyson Chicken) will have cost of goods sold since they sell a product. Service firms (like Google) will not have this cost or a subtotal for gross profit. Otherwise they are similar.

Could we use managerial accounting "tools" to assess the profitability of an organization other than a manufacturing business, ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Motivation

This tests some key elements of major motivation theories.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

View More Free Quizzes
Related BrainMass Solutions

  • Accounting cycle for a merchandising firm vs service firm

    Differences: It's a good idea to mention the differences between the recording of income by service firms and merchandising firms, for example: 1. The format of the income statement for a service firm is different from that of a merchandiser.

  • Inventories section of the balance sheet

    Prepare an income statement for the year 20X1 for OEC & MSI. Summarize the differences between the financial statements of OEC, a merchandiser, and MSI, a manufacturer.

  • Question

    Income for a merchandiser is calculated from the sales minus the cost of goods sold, while income for a service provider comes from service revenue collected when a service is provided.

  • Preparing Financial Statements for Kelly's Boutique

    See attached file The solution prepares financial statements: 1) an income statement for Kelly's Boutique, a merchandiser; 2) a schedule of cost of goods manufactured and an income statement for CoverUP Manufacturing.

  • Evaluate and discuss the following types of transactions

    Others may just go to the balance sheet or the income statement. For the second part, you have to consider what is important to a service company vs. a merchandiser or manufacturer.

  • P16-25A Charlie's Pets Preparing cost of goods manufactured

    an income statement for Fido Treats for the year ended December 31, 2012. 3.How does the format of the income statement for Fido Treats differ from the income statement of a merchandiser?

  • Golden Corp., a merchandiser

    Golden's balance sheets and income statement follow: Prepare a complete statement of cash flows using a spreadsheet as in Exhibit 12A.1 (attached) report operating activities under the indirect method.

  • Difference in Financial Statements

    $ .............................................567,000 The differences in the financial statement are The balance sheet for the merchandiser (OEC) has just one line for inventories, the ending inventory of the items purchased for resale.

  • The steps in the accounting cycle

    (b) Is the measurement of net income for a merchandiser conceptually the same as for a service enterprise? Explain. 5. When is cost of goods sold determined in a perpetual inventory system? 24.

View More Related Solutions